S&P Global Ratings on Dec. 26 changed its outlook on Astoria Energy LLC to negative from stable given continued pressure on power and capacity prices in New York.
Astoria owns a 620-MW combined-cycle, natural gas-fired power plant in Queens County, N.Y.
The revision is based on S&P's expectation that lower power and capacity prices in the New York Independent System Operator Zone J could continue to pressure Astoria's revenue and impede its ability to pay down debt, resulting in a minimum debt service coverage ratios below 1.7x throughout the life of the asset.
The market volatility is driven by weak gas prices, mild weather and weaker-than-expected demand growth, the rating agency said.
S&P, however, affirmed its BB- rating on Astoria with a recovery rating of 1, reflecting its expectation for "very high recovery" in the event of default.
Astoria is owned by a consortium of sponsors, including ENGIE SA, MyPower Corp., JEMB Family LP/Harbert Management Corp. and Energy Investors Fund.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.